Condominiums That Fail To Properly Fund Reserves Will Usually Resort to Costly Special Assessments

Question: My condominium association has no reserve funds for our roof. Every year at the annual meeting, the board asks the owners to waive the reserve funding and every year the owners vote to waive the reserves. Now we need a new roof for the building and the board is telling the owners that there will be a special assessment of over five thousand dollars per unit. Can the board just levy such a large special assessment without the owners voting on it? N.R. (via e-mail)

Answer: Probably. The Florida Condominium Act does not impose any limits on a board’s authority impose special assessments. The statute simply provides that the association must give fourteen days mailed and posted notice of any board meeting where special assessments are to be considered. There are other technicalities in the statute as to the content of the notice, as well as the content of follow-up notices that must be sent. Obviously, any special assessment would have to be for a proper common expense, but I assume there is no debate that your roofs are the association’s responsibility.

Any limitation on a board’s authority to impose a special assessment would have to be contained in the condominium documents. Although not the norm, it is not totally uncommon to see condominium documents that impose limits, such as providing that any special assessment over a certain amount requires unit owner approval. I have heard some debate the legality of such a
restriction.

Your situation demonstrates the risk of routinely waiving the funding of reserves. While associations want to keep assessments low, if there are insufficient reserve funds to pay for a capital item that needs to be replaced, the association has limited options.

 

Written by Joseph Adams

Originally posted at Florida Condo & HOA Blog

Will Florida’s new online election law for community associations spell welcome relief or more headaches?

The Florida Legislature recently approved a new law which will allow community associations to conduct their elections online through the use of electronic voting. While associations in other states have had this ability for some time now, this is a sea change for the millions of Floridians living in shared ownership communities.

For years, many of the disputes in condominiums, cooperatives and homeowners associations, have stemmed from the annual meeting and election process. People who ran for the board and weren’t elected were convinced that the current board or the manager who doesn’t like them somehow “kept them off’.  We’ve heard tales of ballot boxes being stuffed, tampered with and altogether ignored. In the condominium setting, allegations of forgeries on outer envelopes is always a concern while in the HOA setting, complaints of rampant proxy abuse are common in connection with the election of the board members.

Howard Perl, a Shareholder with the law firm of Becker & Poliakoff, has handled these disputes for more than a decade. “Many of the disputes involve judgment calls. Some ballots are discarded when they shouldn’t be and others are allowed when clearly they should have been invalidated” he explained.

Election disputes don’t come cheap. They are subject to mandatory arbitration with a Florida state agency and can cost up to $5,000 or more depending on how hotly contested the matter is.  Florida’s Department of Business and Professional Regulation will be meeting in early August to begin drafting rules to address the new statute.

Now that the path has been cleared to allow Florida’s associations to utilize online voting, the question remains whether this move will result in fewer or greater complaints associated with electing a community’s board of directors.  Remember the national focus on the Sunshine State’s unfortunate hanging chad incident? Hopefully, we will not have a repeat performance and our Florida communities will embrace this new option as one which will (a) likely increase voter participation and (b) reduce the possibility for voter fraud.

 

Written by Donna DiMaggio Berger

Originally posted at Community Association Law Blog

How to Increase Your HOA’s Revenue with Coupon Books

Successful HOA’s are always looking to find creative and unique ways to be competitive and profitable. Would you like to eliminate an annual expense or turn that expense into a profit? Of course you would!

Payment coupon books are an essential and necessary component of any property management company’s billing process. What if you could transform HOA coupon books into marketing tools for local businesses and enjoy an added revenue stream for your HOA?

For decades, SouthData customers have used message coupons inside payment coupon books as a way to communicate with homeowners. Message coupons are extra pages placed into the payment coupon books that contain information instead of payment coupons.

Property management companies can use these message coupons as powerful advertising platforms for business partners in their area. Businesses pay for the ad space within the message coupon, thereby helping you offset the costs of producing the coupon books.

Everyone wins:

  • Advertisers gain a higher return rate, reach target audiences, and enjoy repeated exposure
  • Management companies enjoy added revenue and are reimbursed for the costs of producing payment coupon books
  • Homeowners see ads about products and services that are relevant to their lives

Potential advertisers can include everyone from auto repair shops, electricians, and plumbers to heating & cooling specialists, pest control services, or home security companies. With access to 100% of their market base, you have the ideal platform local advertisers need to reach their audience.

  1. ADVERTISEMENT SPACE: Show businesses a coupon book sample and the message coupon so they will be able to see the advertising space.
  2. ADVERTISER EXCLUSIVITY:  Coupon books have five message coupon slots. Allow only one advertiser per industry in order to guarantee them exclusivity within their market and block out their competitors. Ex: Only one pest control company, etc…
  3. REPEATED EXPOSURE: Ads will be viewed an average of 12 times per year and are usually seen by spouses as well.
  4. MEASUREABLE RESULTS: Advertisers can track their results by offering a redeemable coupon, a unique phone number, or website address in the ad.

Written by Chelsey Seidel

Originally posted at PayLease.com

How Often Should the Condo Association Change Auditors and Attorney?

C.T. from Hartford County writes:AskMisterCondo

Dear Mister Condo,

Thank you for being there to answer questions. What a grand resource!!!!

–How often should one change auditors for a large condo with a budget [excluding reserves] of over 3.5 M?

–Is there a standard/recommended amount of time to have the same auditor year after year?

–Also, the same question re a condo’s lawyer?

Mister Condo replies:

C.T., thank you for the kind words. Let me see if I can repay you with some kind advice.

Generally speaking, auditors are outside third parties that have no vested interest in the association, meaning they have an assignment of reviewing “the books” for the association and giving an opinion as to whether or not everything is in order. Unless there has been a problem of some sort with the auditor’s performance, I am not certain there is any need to change auditors. Keep in mind that your auditor also works for other associations and businesses. If there are no complaints against the auditor from any of these sources, I think I would keep the auditor. Of course, it is a two way street and if the auditor is showing signs that he or she is no longer interested in auditing your association’s records, then it is most definitely time for a new auditor. You need sharp eyes and keen business acumen to do a good job of auditing association records, especially the dollar volume of an association as large as yours.

Condominium lawyers are another story, in my opinion. Many condominium associations suffer from “institutional memory loss” as Boards change leadership and members over the years. Many times, the condo lawyer is one of the few constants for the association, which can be quite useful so the same mistakes are not made again and again by new Board members. That being said, if the association feels their attorney isn’t best serving it, there is no shortage of qualified community association attorneys that could be considered. However, to simply change attorney for the sake of changing attorneys makes no sense to me at all. In fact, it might even create duplicate work for the association if a new attorney were asked to help out with a legal matter a previous attorney had already handled for the association.

The bottom line is that these professionals are external to the association and have no vested interest as unit owners within the association might. If they are performing to the expectations of the association, I see no reason to change them simply for the sake of change. Good luck!

Originally posted at AskMisterCondo.com